• Every water company in England and Wales either hit or beat its leakage target;
• Overall leakage fell by 127 million litres per day (Ml/d) from 3,418 Ml/d in 2006-07 to 3,291 Ml/d in 2007/08. This is equal to the daily needs of nearly one million domestic consumers;
• The number of sewage treatment works seriously breaching permit limits set to protect the environment fell from 152 in 2006-07 to 107 in 2007-08 – the lowest number in the last 10 years;
• The number of serious sewage-related pollution incidents fell from 115 in 2006-07 to 83 in 2007-08 – one-fifth of level 12 years ago; and
• Most companies have reduced the number of properties at risk of sewer flooding, although the returns show that the number of sewer-flooding incidents increased because of last year's severe weather.

Where Ofwat had concerns about some specific companies' customer service and asset management last year, this has also improved. At the same time, the extremely heavy rain and floods in July 2007 inundated some key water supply assets, causing an exceptionally high number of water supply interruptions. At its peak in 1994-95 overall leakage was 5,110 Ml/d. By 2009-10 overall leakage is expected to have fallen to 3,300 Ml/d.

Ofwat Chief Executive Regina Finn said:

"This is a positive picture, showing that the water sector can and is meeting the needs of consumers and the environment. This has been driven by the action we have taken in key areas like controlling leakage, asset management and improving customer services.

"Now it is important that companies maintain this progress, and raise their game even more. Rising consumer expectations, the impact of climate change, and the demands of a growing population will all provide new challenges. We will expect the sector to meet these challenges while continuing to deliver high-quality, good value services to consumers."

As part of their work to address these challenges, companies have started to report on their carbon footprint. Ofwat has incorporated carbon accounting into its annual reporting to help improve this process. This will enable companies to make investment choices in the water and waste water sector that minimise their carbon costs, contributing towards climate change mitigation.